October’s CPI Remains Stubbornly High At 5.4%
Inflation remained stubbornly high in October, with the consumer price index (CPI) rising 5.4% compared to a year ago. Though this came down from the 5.5% in September, it exceeded the consensus forecast of 5.2%. After adjusting for seasonal factors, CPI inched up 0.2% on a month-on-month basis. The unrelenting rise in consumer prices was underscored by higher housing, transport and food costs. Housing and transport costs spiked 9.9% and 10.5% respectively – the former was attributed to higher electricity tariffs and higher imputed rentals of owner-occupied accommodation, while the latter was due to higher petrol prices and higher premiums of car certificate of entitlement. For core inflation, which excludes accommodation and private road transport costs, it edged up to 2.3% from September’s 2.1%.
Significance: Economists are expecting inflation pressure to ease next year, given ‘deflationary forces from slowing global growth dominate’ and weak growth ‘tames wage pressures’. This coincides with the view of the government, which is expecting headline inflation and core inflation to moderate to 2.5-3.5% and 1.5-2% respectively.
TA Corp Wins Two Contracts Worth $271m
TA Corporation (TA Corp) has secured two new construction contracts from Allgreen Properties and its subsidiary worth a total of $271 million. The first contract is a proposed condominium development at Upper Serangoon Road (contract period is 34 months) while the second contract is a proposed condominium development at West Coast Road (contract period of 28 months). Construction for both contracts is scheduled to commence early next year. Besides striving to secure more construction projects, TA Corp is also looking at opportunities to expand its real estate development business, both in Singapore and in its overseas markets.
Significance: The two new deals bring TA Corp’s order book for construction projects to about $587 million. In addition, majority of TA Corp’s order book is expected to be progressively fulfilled over the next 34 months, ensuring a stable recognition of revenue over the period.
Keong Hong Looks Set For Catalist Listing
Keong Hong Holdings (Keong Hong), a construction services group, has lodged a preliminary offer document for a Catalist listing. Details of the pricing and the number of placement shares are not available yet, however, it was noted that the group intends to increase presence overseas with an emphasis on the construction of hotels and resorts. It is currently working on a construction project in a resort development in the Maldives, which is slated for completion by April 2012. On its Singapore business, the group expects to benefit from the strong construction demand which has a projected value of contracts awarded at between $22 billion and $28 billion for this year.
Significance: Building on its experience as a main contractor, Keong Hong has further set eyes to expand into property development. Specifically, it has recently entered into a joint venture with FCL Court Tampines to develop a 728-unit executive condominium in Punggol.